To compute equivalent units of production using the FIFO method of process costing, work for the current period must be stated in units a.. The FIFO method of process costing will produc
Trang 12 Process costing is used in companies that
a engage in road and bridge construction
b produce sailboats made to customer specifications
c produce bricks for sale to the public
d construct houses according to customer plans
4 A process costing system is used by a company that
a produces heterogeneous products
b produces items by special request of customers
c produces homogeneous products
d accumulates costs by job
6–1
Trang 25 Which is the best cost accumulation procedure to use for continuous mass production of
6 Equivalent units of production are equal to the
a units completed by a production department in the period
b number of units worked on during the period by a production department
c number of whole units that could have been completed if all work of the period
had been used to produce whole units
d identifiable units existing at the end of the period in a production department
7 In a process costing system using the weighted average method, cost per equivalent unit
for a given cost component is found by dividing which of the following by EUP?
a only current period cost
b current period cost plus the cost of beginning inventory
c current period cost less the cost of beginning inventory
d current period cost plus the cost of ending inventory
8 The weighted average method is thought by some accountants to be inferior to the FIFO
method because it
a is more difficult to apply
b only considers the last units worked on
c ignores work performed in subsequent periods
d commingles costs of two periods
Trang 39 The first step in determining the cost per EUP per cost component under the weighted
average method is to
a add the beginning Work in Process Inventory cost to the current period’s
production cost
b divide the current period’s production cost by the equivalent units
c subtract the beginning Work in Process Inventory cost from the current period’s
production cost
d divide the current period’s production cost into the EUP
10 The difference between EUP calculated using FIFO and EUP calculated using weighted
average is the equivalent units
a started and completed during the period
b residing in beginning Work in Process Inventory
c residing in ending Work in Process Inventory
d uncompleted in Work in Process Inventory
11 EUP calculations for standard process costing are the same as
a the EUP calculations for weighted average process costing
b the EUP calculations for FIFO process costing
c LIFO inventory costing for merchandise
d the EUP calculations for LIFO process costing
12 In a FIFO process costing system, which of the following are assumed to be completed
first in the current period?
a units started this period
b units started last period
c units transferred out
d units still in process
Trang 413 To compute equivalent units of production using the FIFO method of process costing,
work for the current period must be stated in units
a completed during the period and units in ending inventory
b completed from beginning inventory, units started and completed during the
period, and units partially completed in ending inventory
c started during the period and units transferred out during the period
d processed during the period and units completed during the period
14 The FIFO method of process costing will produce the same cost of goods transferred out
amount as the weighted average method when
a the goods produced are homogeneous
b there is no beginning Work in Process Inventory
c there is no ending Work in Process Inventory
d beginning and ending Work in Process Inventories are each 50 percent complete
15 The primary difference between the FIFO and weighted average methods of process
costing is
a in the treatment of beginning Work in Process Inventory
b in the treatment of current period production costs
c in the treatment of spoiled units
d none of the above
16 Material is added at the beginning of a process in a process costing system The
beginning Work in Process Inventory for the process was 30 percent complete as to conversion costs Using the FIFO method of costing, the number of equivalent units of material for the process during this period is equal to the
a beginning inventory this period for the process
b units started this period in the process
c units started this period in the process plus the beginning Work in Process
Inventory
d units started and completed this period plus the units in ending Work in Process
Inventory
Trang 517 In a cost of production report using process costing, transferred-in costs are similar to
the
a cost of material added at the beginning of production
b conversion cost added during the period
c cost transferred out to the next department
d cost included in beginning inventory
18 In a process costing system, the journal entry to record the transfer of goods from
Department #2 to Finished Goods Inventory is a
a debit Work in Process Inventory #2, credit Finished Goods Inventory
b debit Finished Goods Inventory, credit Work in Process Inventory #1
c debit Finished Goods Inventory, credit Work in Process Inventory #2
d debit Cost of Goods Sold, credit Work in Process Inventory #2
19 Transferred-in cost represents the cost from
a the last department only
b the last production cycle
c all prior departments
d the current period only
20 Which of the following is(are) the same between the weighted average and FIFO
methods of calculating EUPs?
account for calculations account for
Trang 621 Process costing techniques should be used in assigning costs to products
a if a product is manufactured on the basis of each order received
b when production is only partially completed during the accounting period
c if a product is composed of mass-produced homogeneous units
d whenever standard-costing techniques should not be used
22 Averaging the total cost of completed beginning inventory and units started and
completed over all units transferred out is known as
23 A process costing system
a cannot use standard costs
b restates Work in Process Inventory in terms of completed units
c accumulates costs by job rather than by department
d assigns direct labor and manufacturing overhead costs separately to units of
production
24 A process costing system does which of the following?
Calculates EUPs Assigns costs to inventories
Trang 725 A process costing system
Calculates average cost Determines total units toper whole unit account for
26 A hybrid costing system combines characteristics of
a job order and standard costing systems
b job order and process costing systems
c process and standard costing systems
d job order and normal costing systems
27 When standard costs are used in process costing,
a variances can be measured during the production period
b total costs rather than current production and current costs are used
c process costing calculations are made simpler
d the weighted average method of calculating EUPs makes computing
transferred-out costs easier
28 Short Company transferred 5,500 units to Finished Goods Inventory during June On
June 1, the company had 300 units on hand (40 percent complete as to both material andconversion costs) On June 30, the company had 800 units (10 percent complete as to material and 20 percent complete as to conversion costs) The number of units started and completed during June was
Trang 829 Brown Co started 9,000 units in October The company transferred out 7,000 finished
units and ended the period with 3,500 units that were 40 percent complete as to both material and conversion costs Beginning Work in Process Inventory units were
30 X Co had beginning Work in Process Inventory of 5,000 units that were 40 percent
complete as to conversion costs X started and completed 42,000 units this period and had ending Work in Process Inventory of 12,000 units How many units were started this period?
31 Winn Co uses a weighted average process costing system Material is added at the start
of production Winn Co started 13,000 units into production and had 4,500 units in process at the start of the period that were 60 percent complete as to conversion costs IfWinn transferred out 11,750 units, how many units were in ending Work in Process Inventory?
a 1,250
b 3,500
c 5,750
d 3,000
Trang 932 Murphy Co uses a weighted average process costing system and started 30,000 units
this month Murphy had 12,000 units that were 20 percent complete as to conversion costs in beginning Work in Process Inventory and 3,000 units that were 40 percent complete as to conversion costs in ending Work in Process Inventory What are
equivalent units for conversion costs?
33 Kim Co makes small metal containers The company began December with 250
containers in process that were 30 percent complete as to material and 40 percent
complete as to conversion costs During the month, 5,000 containers were started At month end, 1,700 containers were still in process (45 percent complete as to material and 80 percent complete as to conversion costs) Using the weighted average method, what are the equivalent units for conversion costs?
34 Zammillo Co uses a FIFO process costing system The company had 5,000 units that
were 60 percent complete as to conversion costs at the beginning of the month The company started 22,000 units this period and had 7,000 units in ending Work in Process Inventory that were 35 percent complete as to conversion costs What are equivalent units for material, if material is added at the beginning of the process?
Trang 1035 Lisa Co makes fabric-covered hatboxes The company began August with 500 boxes in
process that were 100 percent complete as to cardboard, 80 percent complete as to cloth,and 60 percent complete as to conversion costs During the month, 3,300 boxes were started On August 31, 350 boxes were in process (100 percent complete as to
cardboard, 70 percent complete as to cloth, and 55 percent complete as to conversion costs) Using the FIFO method, what are equivalent units for cloth?
Use the following information for questions 36–38
Forte Co has the following information for May:
Beginning Work in Process Inventory
(70% complete as to conversion) 6,000 units
Ending Work in Process Inventory
(10% complete as to conversion) 8,500 units
Beginning WIP Inventory Costs:
All material is added at the start of the process and all finished products are transferred out
36 How many units were transferred out in May?
a 15,500
b 18,000
c 21,500
d 24,000
Trang 1137 Assume that weighted average process costing is used What is the cost per equivalent
unit for material?
Trang 12Use the following information for questions 39–46.
The December 25th Co makes wreaths in two departments: Forming and Decorating Forming began the month with 500 wreaths in process that were 100 percent complete as to material and
40 percent complete as to conversion During the month, 6,500 wreaths were started At month end, Forming had 2,100 wreaths that were still in process that were 100 percent complete as to material and 50 percent complete as to conversion Assume Forming uses the weighted average method of process costing Costs in the Forming Department are as follows:
Beginning Work in Process Costs:
The Decorating Department had 600 wreaths in process at the beginning of the month that were
80 percent complete as to material and 90 percent complete as to conversion The department had 300 units in ending Work in Process that were 50 percent complete as to material and 75 percent complete as to conversion Decorating uses the FIFO method of process costing, and costs associated with Decorating are:
Beginning WIP Inventory:
Trang 1340 What was the cost transferred out of Forming during the month?
41 Disregard your answer to question 39 Assume 8,000 units were transferred to
Decorating Compute the number of equivalent units as to costs in Decorating for the transferred-in cost component
42 Disregard your answer to question 39 Assume 8,000 units were transferred to
Decorating Compute the number of equivalent units in Decorating for material
43 Disregard your answer to question 39 Assume 8,000 units were transferred to
Decorating Compute the number of equivalent units in Decorating for conversion
Trang 1444 Disregard your answer to question 40 Assume that 8,000 units were transferred to
Decorating at a total cost of $16,000 What is the material cost per equivalent unit in Decorating?
45 Disregard your answer to question 40 Assume that 8,000 units were transferred to
Decorating at a total cost of $16,000 What is the conversion cost per equivalent unit in Decorating?
46 Assume the material cost per EUP is $8.00 and the conversion cost per EUP is $15 in
Decorating What is the cost of completing the units in beginning inventory?
Trang 15Use the following information for questions 47–51.
BCW Co adds material at the start to its production process and has the following information available for November:
Beginning Work in Process Inventory
(40% complete as to conversion) 7,000 units
Ending Work in Process Inventory
(25% complete as to conversion) 2,500 units
Trang 1650 Calculate equivalent units of production for material using weighted average.
Use the following information for questions 52–63
Storey Co adds material at the start of production February information for the company follows:
Beginning Work in Process Inventory
(45% complete as to conversion) 10,000 units
Ending Work in Process Inventory
(80% complete as to conversion) 8,200 units
Beginning Work in Process Inventory Costs:
Trang 1753 What is the total cost to account for?
Trang 1858 What are the equivalent units for conversion using the FIFO method?
Trang 1963 What is the cost of all units transferred out using the FIFO method?
Use the following information relating to I M Cute Co for questions 64–73
Beginning inventory (30% complete as to Material B
and 60% complete for conversion) 700 units
Ending inventory (50% complete as to Material B
and 80% complete for conversion) 500 units
Beginning inventory costs:
Trang 2065 Assuming a FIFO method of process costing, compute EUP units for Materials A and B.
68 Assuming a weighted average method of process costing, compute the average cost per
unit for Material A
a $20.10
b $20.00
c $31.25
d $31.00
Trang 2169 Assuming a FIFO method of process costing, compute the average cost per EUP for
71 Assuming a weighted average method of process costing, compute the average cost per
EUP for Material B
Trang 2273 Assuming a weighted average method of process costing, compute the average cost per
EUP for conversion
74 Which of the following is subtracted from weighted average EUP to derive FIFO EUP?
a beginning WIP EUP completed in current period
b beginning WIP EUP produced in prior period
c ending WIP EUP not completed
d ending WIP EUP completed
SHORT ANSWER/PROBLEMS
1 Discuss the assignment of costs to transferred-out inventories in both process costing
methods
ANSWER: The assignment of costs in a process costing system first involves
determining total production costs These costs are then assigned to units completed andtransferred out during the period and to the units in Work in Process Inventory at the end of the period To assign costs, the cost per equivalent unit must be established using either the FIFO or weighted average method The cost per EUP is then multiplied by the number of equivalent units in the component being costed Transferred-out costs using the weighted average method are computed as the number of units transferred times the total price per equivalent unit When using FIFO, transferred-out units are computed as follows: the costs in beginning WIP are added to the current period costs to complete the units which sums to the total cost of beginning WIP; the units started and completedare priced at current period costs; the total of the costs of beginning inventory and units started and completed are then transferred out